Australia Holds Interest Rate as Employment Bonanza Winds Down

Australia left its key interest rate unchanged at a record lowTuesday -- as expected -- amid the slowing of a hiring boom.

Reserve Bank Governor Philip Lowe kept the cash rate at 1.5 percent, where it has stood since late 2016, as the central bank waits for inflation to strengthen. The nation’s jobs growth has declined to a three-month annualized pace of 1.2 percent in 2018 from a blockbuster 3.4 percent for the whole of last year, Westpac Banking Corp. estimates.

“The bank’s central forecast for the Australian economy remains for growth to pick up, to average a bit above 3 percent in 2018 and 2019.,” Lowe said in astatement. “Employment has grown strongly over the past year, although growth has slowed over recent months.”

The local dollar edged lower, trading at 75.35 U.S. cents at 2:33 p.m. in Sydney from 75.41 prior to the release. It’s fallen about 6 percent in the past three months.

The RBA has shifted to a supporting role in the nation’s economy, styling itself as a predictable player. Lowe has said the next rate move will likely be an increase at some point, reflecting forecasts for faster growth that are due to be updated Friday. Traders are pricing in little chance of a tightening this year as inflation hovers near the bottom of the central bank’s 2 percent to 3 percent target, with 2019 seen as a more realistic prospect.